With negative yielding bonds in Germany it is nice to read an article again that I posted in 2016.
=> https://seekingalpha.com/article/3979731-buying-negative-yielding-bonds
Germany's 10 year bond is now at -0.4% and goes down 0.5%/annum.
Who buys these bonds? The pension funds, the ECB, etc...
If they want to stay profitable on this trade, they need to buy as many bonds as possible to keep rates falling by 0.5%/annum.
But the limit is -10% as you can see on this chart. Once you hit -10% on 10 year government bonds, it's over with. You cannot make any profits at -10% bond yields anymore.
=> https://seekingalpha.com/article/3979731-buying-negative-yielding-bonds
Germany's 10 year bond is now at -0.4% and goes down 0.5%/annum.
Who buys these bonds? The pension funds, the ECB, etc...
If they want to stay profitable on this trade, they need to buy as many bonds as possible to keep rates falling by 0.5%/annum.
But the limit is -10% as you can see on this chart. Once you hit -10% on 10 year government bonds, it's over with. You cannot make any profits at -10% bond yields anymore.
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